Open letter to brands sourcing to Yue Yuen Dongguan China

Subject: Adidas, Nike, Timberland, you created this problem, now fix it! Pay workers social insurance now!

To Adidas, Nike and Timberland

Hong Kong, 24 April 2014

Since 5 April 2014, workers from Yue Yuen Dongguan factory have gone on strike. Striker size flew up from 1,000 to 50,000 in only few days. Almost all factory workers have joined the strike. This shows the anger of workers towards government and the company has reached the limit. The dispute was triggered by the conspiracybetween the Yue Yuen factory and the local government– The factory did not fully pay social insurance for the workers and the local government officials did not observe this unlawful practice. Workers also discovered the work contracts they are holding are not legally valid. They request the factory to pay back pension and housing provident fundarrear payment, re-sign valid work contract and raise the wage.

Until today, there are almost 50,000 workers, including frontline workers and various ranking management staff, joining the strike. On 17 April, Mr. Liu, the director of Yue Yuen told us the total workforce in Yue Yuen Dongguan is 48,000. It means that the whole factory has gone on strike. On 18 April, there were reports about the strike expansion to Yue Yuen Jiangxi factory.

We agree with the worker’s decision to blame Yue Yuen and government for the problem. It is because Yue Yuen has cheated on their social insurance payment to lower their production cost, and exploit their wages and benefit; the local officials failed to observe the company’s illegal act and even assisted the company to exploit workers, in return to protect their tax income and corruption chances.

However, workers have ignored the role of international buyers in this dispute. Those buyers are much stronger and powerful. Yue Yuen supplies product for international big brands like Nike, Adidas, Reebok, Asics, New Balance, Puma, Converse, Salomon and Timberland. The workers have been producing shoes for these gigantic buyers and enterprises. They gain the biggest part of this huge profit and regard all workers in the supply chain as slaves!

According to reports, Yue Yuen is the biggest Chinese supplier to Adidas. Adidas and other international brands cannot ignore their corporate social responsibility in the labour dispute. It is because these international buyers claim that they hire third party auditors to ensure suppliers meeting their production standards and code of conduct, and to monitor the working condition and labour practice in their suppliers but they just never discover this malpractice over the years! Or, do they just ignore what they have seen in their suppliers? If it is the former, then auditing is just a public relation tool; if it is the latter, these brands and buyers are conspirators in this crime!

Therefore, we demand the international buyers of Yue Yuen should bear their corporate social responsibility.

They should not just confirm their suppliers in China to obey the local laws and regulations, paying workers social insurance; moreover, they should bear the responsibility with Yue Yuen to pay back all workers’ pensions and housing provident fund in arrears, to protect the rights that workers deserve.

The followings are our suggestion:

Yue Yuen should pay social insurance immediately for workers according to the actual wages they earn.

Yue Yuen should also pay back the pensions in arrears over the years. All international buyers that buy orders from Yue Yuen should share the worker social insurance payment together with Yue Yuen.

Perhaps the brands would say this problem is made by the government officials and the company and they are “clean” from this. However, our experiences tell brands are responsible and they covered compensation:

In 1993, 87 female workers died and 47 injured in tragic fire broke out in Zhili Factory in Shenzhen. Through endless actions by Hong Kong and international labour groups, Chicco– the Italian toy brand compensated 1.2 million Hong Kong dollars for workerseventually;

In 2013, more than 1000 female garment workers died and more than 2400 injured in the disastrous Rana Plaza collapse in Bangladesh. Through the strong effort by international consumer and labour groups, dozens of the buyers agreed to pay back to victims.

We think that brands are responsible to help on the negotiation to release detained workers. Workers would not go on strike and got arrested if the buyers and factory did not commit this illegal practice. Therefore, Adidas and Yue Yuen should ensure all detained workers will be released immediately and would not be charged. There is a remarkable example in the past:

In 2004, strike broke out in two shoe factories (Xing’ang and XingXiong) of the Taiwanese-owned company Stella International in Dongguan. Eight workers were prosecuted to damage factory machines and were sentenced to imprisonment. After the protest and action towards brands by Hong Kong and international labour groups, those workers were released and some of them resumed their duties in the factory.